Friday, March 30, 2012

Residents' decision this week to sell The Point Lake and Golf Club to Donald Trump resulted from two votes - one of which was quite close.

Donald Trump's son Eric told the Observer after Thursday's night vote that he and his father were pleased with what he called "overwhelming" support.

Homeowners were asked to vote on two issues affecting the sale of the exclusive Lake Norman club. One vote involved club members, whose votes were weighted depending on their membership levels. Those with golf memberships, for example, had the most votes.

Of the 1,793 weighted votes cast, 73 percent supported a sale, compared to 27 percent against the sale. Many of the club's golfers had favored a sale, residents have told the Observer.

In the other vote, homeowners were asked to vote on approving an amendment to documents governing the homeowners association. Fifty-one percent of total property owners were needed to approve the amendment, which would allow the sale.

Residents who voted yes to a sale have said the club would benefit from Trump's deep pockets and passion for golf. They expect to see better food, enhanced facilities and possibly rising home values because of Trump's involvement. Opponents say they worry about rising prices and disruption to their quality of life.

Crescent Resources developed the Nantucket-themed community and club in the late-1990s. All homeowners in the roughly 900-lot community must belong to the club. During the past few months, the prospect of a sale to the Trump Organization stirred up emotions among neighbors, pitting some against one another.

Wednesday, March 28, 2012

Members of The Point Lake and Golf Club in Mooresville could find out this week whether Donald Trump will be their new owner.

The real estate mogul has offered to buy the exclusive Greg Norman-designed golf course and club for roughly $3 million. Trump would also assume the club's liabilities and has promised to invest millions in upgrades, including new tennis courts and improved club facilities.

Residents have been submitting proxies this month and will be allowed to vote at a meeting Thursday night. Results are expected to be announced the same evening.

The prospect of a sale to Trump has divided the luxury community on Lake Norman. All homeowners in the roughly 900-lot community must belong to the club.

Some residents, particularly those with golf memberships at the club, say they welcome the celebrity developer with deep pockets and a passion for golf. Others say they are worried Trump will change the quiet character of their Nantucket-themed community and raise prices.

Some residents also say they remain concerned with how the deal was negotiated, saying the club's board was not been transparent enough. For example, they say the board didn't fully explore other ownership alternatives, such as having members buy the club. They also complain that proposals from other investors wanting to buy the club weren't shared with residents.

The conflict has become heated among neighbors, people say. Some residents who oppose the sale say they have received mean-spirited phone calls from people yelling at them. Supporters of a sale, meanwhile, have criticized members for speaking publicly about the issue. A pro-sale website told residents to stop talking to the media saying they were embarrassing themselves and the club.

The Trump Organization has been talking with The Point for about two years. Negotiations started with Crescent Resources, the community's developer. While residents owned the club, Crescent operated it until the end of last year, when it transferred control to the club to members.

Tuesday, March 27, 2012

Charlotte's commercial real estate market is improving, newcomers are continuing to bring innovation and investors are starting to lend more, possibly in smaller markets such as Charlotte, a group of speakers told a crowd of about 300 real estate professionals Tuesday.

The relatively rosy outlook was shared by professionals at a commercial real estate market forecast held at Carmel Country Club and sponsored by the North Carolina chapter of CCIM. CCIM stands for Certified Commercial Investment Member, a designation awarded to individuals in the commercial and investment real estate industry.

Wells Fargo senior economist Mark Vitner spoke about some of his concerns, including a worry about economic struggles occurring in Europe and China. Charlotte's economic growth has been driven in part by an increase in manufacturing, specifically exports, Vitner said. Europe and China buy much of the area's exports.

Vitner also said the retail industry remains weak because there has not been much growth in workers' incomes. He noted that many of the jobs that are being created, including those in home health care and retail trade, tend to be lower paying or offer part-time hours.

On a brighter note, Mike Ortlip, senior vice president at Grandbridge Capital, said more capital is flowing into the market. Insurance companies, in particular, are investing, he said. More of this money is expected to flow into secondary markets, such as Charlotte, he said.

Veteran developer Johnny Harris, president of Lincoln Harris, was the Charlotte region's most enthusiastic cheerleader, highlighting the area's attributes with a slideshow titled: The Charlotte Region: Alive and Well.

"Things are getting better," Harris said. "It's over," he said of the economic doldrums that have plagued the real estate markets.

Among the proof: A rising number of building permits for non-residential construction in recent months, the continued migration of newcomers to the Charlotte area, and the strength of the Charlotte Douglas International airport, he said.

"The airport is the engine (for economic growth)," he said.

Perhaps the area's biggest challenge, he said, was the need to groom future leadership.

Charlotte's largest corporations once provided local leadership, he said. Now, he said, "the corporations are so large they don't let leaders take time in the community."

He urged attendees to stop to help others with their business endeavors and to provide support and leadership during rough times. He also made a nod to his own stumbles.

"I've had skinned knees. I've had a bank turn me down for a loan," he said. "You're going to get through this. (Charlotte) is the best place in the world."

US. home prices continued their decline in January, reflecting how prices are still under pressure, according to a report released Tuesday.

Data for Charlotte-area home prices, however, was excluded from the report because it wasn’t available.

The Standard & Poor's/Case-Shiller Home Price Index, which measures home prices in 20 cities, fell 3.8 percent in January compared to a year ago.

S&P’s David Blitzer said in a statement that the group did not calculate a January index for Charlotte because of delays in reporting for Mecklenburg County.

“We are not sure of the reasons for the delays, but we do expect to see data in next month’s release,” said Blitzer, chairman of the index committee at S&P Indices. Charlotte-area prices in December were down 2 percent from November and 2.3 percent from December 2010, according to the index, which tracks repeat sales.

Sixteen of the 19 cities included in the January index saw prices decline on a monthly basis, an improvement over December, where 19 of 20 cities saw decreases. On an annual basis, Miami, Phoenix and Washington saw gains. Atlanta continues to suffer the most, posting the lowest average return of -14.8 percent.

The housing market has shown promising signs, according to a report by the National Association of Realtors. The group said its Pending Home Sales Index, based on contracts signed in January, increased 2 percent to 97.0 - the highest reading since April 2010. The Case-Shiller Home Price Index is a lagging indicator.

Economists and local real estate experts say they think area home prices will continue to fall this year in part because the market must cope with a large supply of available houses, including distressed ones.

Additional pressure also comes from a looming shadow inventory that could hit the market. Shadow inventory includes homes that are in the foreclosure process, likely to enter the foreclosure process or owned by banks but not on the market. These homes are not included in official inventory statistics.

Monday, March 26, 2012

Chiquita Brands International has signed a lease for more than 130,000 square feeet in the NASCAR Plaza building uptown, real estate firm Cushman & Wakefield | Thalhimer announced Monday.

The banana giant announced last year it was moving its corporate headquarters from downtown Cincinnati to uptown. Chiquita will occupy six floors in NASCAR Plaza by September.

"We are pleased to finalize the location of our new global headquarters in Charlotte," said Fernando Aguirrre, chairman and chief executive officer. "NASCAR Plaza is the perfect location to base our global operations, and we look forward to joining the vibrant business community in the Uptown Area."

Broker Warren M. Snowdon, senior vice president in Cushman & Wakefield | Thalhimer's Charlotte office said in a statement it was an honor to represent Chiquita on their relocation.

Thursday, March 22, 2012

Tranquil Court in Charlotte has been bought by a New York investor, illustrating how national companies are becoming more active in the Queen City, say brokers involved in the deal.

A multi-tenant office and retail building, Tranquil Court was bought March 21 by a group associated with LRC Opportunity Fund, a real estate firm based in the New York metro area that has offices in Winston-Salem and Charlotte.

"We are seeing a tremendous amount of capital chasing core, stabilized assets in strong secondary and tertiary markets as investors seek stronger yields than those offered in the priamry markets," said Patrick Gildea with CBRE. "The Tranquil Court sale is one example of a number of recent transactions that prove Charlotte has returned to the radar of investors on a national scale."

The property, located along Selwyn Avenue in Myers Park, was completed in 2010, has 61,918 square feet and is fully leased.

Friday, March 16, 2012

The residential real estate market could be stabilizing, with pockets of the country starting to see home prices appreciate, according to executives with Wells Fargo Home Mortgage.

Conditions in the Carolinas' housing market, meanwhile, are "excellent" and "very solid," they also said.

Around 100 local Realtors gathered at Regal Cinemas Stonecrest Thursday to listen to Wells Fargo executives talk about the housing market and ways they could improve business in 2012.

The event, called CineMeeting, was broadcast in real time to 100 movie theaters across the country. The goal of the event, the bank's fifth annual telecast, is to educate and inspire agents, organizers said.

The Observer also spoke with two bankers before the presentation to get their feel for the regional and local markets.

Cliff Frohn, Southeast Division Manager for Wells Fargo Home Mortgage, said consumer confidence about the economy in general is rising, which bodes well for the housing market. He cited a February survey by Fannie Mae showing 70 percent of those polled think now is a good time to buy a home, down 1 percent from January.

Frohn said foreclosures will continue to weigh on some markets and push prices down. But he also praised the bank's efforts to reach out to borrowers, saying of the borrowers the bank talks to, seven out of 10 are able to avoid foreclosure because of loan modifications or other arrangements.

"If we can talk to you, there's a 70 percent chance we can help you," he said.

Wells Fargo is one of the banks that agreed to a settlement last month with federal agencies.

The deal resolved claims that banks used shoddy servicing and improper foreclosure practices such as signing foreclosure related documents without a notary or knowing whether the facts they contained were correct. North Carolina will receive $338 million of the $25 billion settlement. The money will go to help struggling homeowners. The settlement also sets new mortgage servicing standards.

As for Charlotte's market, Andrew Misocky, Wells Fargo Mortgage Area Manager, said he is seeing signs the local market is improving.

For example, the median sales price for the Charlotte area is around $185,000, down from $220,000 in 2007, but up from $180,000 where it has been relatively recently.

"I think it's a sign of new momentum," Misocky said.

Misocky and Frohn both said they are hearing Realtors talk about receiving multiple offers on houses, something that hasn't happened often during the past five years.

Asked if the market has hit the bottom, Frohn said: "It feels it not only is the bottom but that we're starting on the way up."

Thursday, March 8, 2012

The developer of the Vue condominium highrise in uptown says the tower will remain a condo building.

A real estate firm published a report this week saying two insurance companies that control some of the debt on the Vue luxury condominium tower in uptown are trying to sell the project’s troubled loan to investors interested in changing the condos into apartments.

The insurance companies, based in Germany and Japan, control $130 million of the tower’s $195 million balance on its construction loan, Real Estate Alert reported Wednesday.

But developer Dan McLean with MCL Cos. of Chicago said there are no changes planned and shared the following statement with the Observer:

The VUE Charlotte is remaining a condominium building. Nothing has changed. Several of its European mezzanine lenders are attempting to sell their junior mortgage to a third party investor. The VUE Charlotte has nothing to do with this process and will continue to sell condominiums as it always has. The VUE Charlotte has not been in default on its mortgage.

Real Estate Alert reported that MCL defaulted on the loan in February 2011, which the developer says is not true. It also reported that a buyer would also have to pay off the loan’s remaining $58 million portion, held by Goldman Sachs.

Real Estate Alert has reported that McLean personally guaranteed the Vue’s construction loan when it was restructured in late 2009. The loan maturity was extended to late 2012, "but the cashflow woes worsened, as new sales dried up and some early buyers successfully sued to be let out of their purchase agreements," the report says.

The $275 million Vue at Fifth and Pine streets overcame fierce challenges when it became the only new luxury condo tower to survive the recession.

As sales agents struggled to sell condo units in the weak housing market, McLean has repeatedly said he would never turn the tower into rental units. In an October 2009 interview, McLean told the Observer there was “no way” the Vue condo tower would convert to apartments, as other condo projects had done.

The 50-story Vue offers studios, one-bedroom units, two-bedroom units and penthouses. It features an Olympic-size pool, tennis court, fitness center, dog-walking area and a wine cellar.

Between the time the luxury condo tower was announced in 2005 and when it was finished in fall 2010, the economy had blossomed and then burst, uptown condo projects have sprouted and then fallen out of favor, and buyers have gone scarce - either unable or unwilling to commit money toward a new home purchase.

McLean refused to lower the sales price and said he was betting on buyers looking for second homes.

The Vue has said roughly 60 percent of the 409-unit building was presold. But relatively few of those units have closed. The Vue’s condos started selling from just under $200,000 to more than $2 million. Buyers paid 10 percent of the contracted sales price as a deposit.

Two foreign insurance companies that control some of the debt on the Vue luxury condominium tower in uptown are trying to sell the project's troubled loan to investors interested in changing the condos into apartments, an industry publication is reporting.

The insurance companies control $130 million of the tower's $195 million balance on its construction loan, according to the March 7 issue of Real Estate Alert. The developer, MCL Cos. of Chicago, defaulted on the loan in February 2011, the alert says. A buyer would also have to pay off the loan's remaining $58 million portion, held by Goldman Sachs.

The $275 million Vue at Fifth and Pine streets overcame fierce challenges when it became the only new luxury condo tower to survive the recession.

As sales agents struggled to sell condo units in the weak housing market, developer Dan McLean repeatedly said he would never turn the tower into rental units. In an October 2009 interview, McLean told the Observer there was "no way" the Vue condo tower would convert to apartments, as other unsuccessful condo projects had done.

McLean personally guaranteed the Vue's construction loan when it was restructured in late 2009, Real Estate Alert reported. The loan maturity was extended to late 2012, "but the cashflow woes worsened, as new sales dried up and some early buyers successfully sued to be let out of their purchase agreements," the report says.

Between the time the luxury condo tower was announced in 2005 and when it was finished in fall 2010, the economy has blossomed and then burst, uptown condo projects have sprouted and then fallen out of favor, and buyers have gone scarce - either unable or unwilling to commit money toward a new home purchase. Some buyers have said appraisals came in below contracted sales prices, making it difficult to get financing.

McLean refused to lower the sales price and said he was betting on buyers looking for second homes.

The Vue has said roughly 60 percent of the 409-unit building was presold. But relatively few of those units have closed. The Vue's condos started selling from just under $200,000 to more than $2 million. Buyers paid 10 percent of the contracted sales price as a deposit.

But the Vue suffered significant legal blows last year as buyers sued to get out of contracts or recover deposits.

In April, a Mecklenburg County Superior Court judge ruled the developer can keep only a deposit from buyers who signed contracts, but can't force them to close on their units. MCL Cos. had sued at least 10 buyers, claiming they breached their contract to buy units.

And in November, a federal judge ruled that a couple who tried to get out of their contract should get their $145,485 deposit back.

U.S. Chief District Judge Robert Conrad Jr. ruled that a proper description of the property had not been provided with the sales contract as required by the Interstate Land Sales Full Disclosure Act. The buyers, therefore, were entitled to cancel the agreement within two years and get their earnest money back, the ruling said.

Charlotte's apartment market, meanwhile, has been booming as occupancy rates and rents rise. While commercial construction overall remains at a standstill, developers have announced plans for new apartment complexes. Existing projects have sold at a premium.

The 51-story Vue offers studios, one-bedroom units, two-bedroom units and penthouses. It features an Olympic-size pool, tennis court, fitness center, dog-walking area and a wine cellar.

Friday, March 2, 2012

Two reports on the housing market released this week show how
foreclosures and falling home prices continue to plague the industry. Yet, a third report says that because
of recent promising data, that “hopes have been raised that the long-awaited
recovery in housing is finally underway.”

In the Charlotte
area,16 percent of residential properties that had a mortgage were under water
in the fourth quarter of 2011, according to CoreLogic, a real estate research
firm. That translates to roughly 61,000 area homes being worth less than their outstanding
loan amounts, up from 58,800 properties at the end of the third quarter 2011.

An additional 34,000 properties were in what CoreLogic calls “near negative
equity,” or where borrowers had less than 5 percent equity in their home.

“The high level of negative equity and the inability to pay is
the “double trigger” of default, and the reason we have such a significant
foreclosure pipeline,” said Mark Fleming, CoreLogic chief economist. “...Negative
equity will take an extended time to improve, and if there is a hiccup in the
economic recovery, it could mean a rise in foreclosures.”

Nationally, nearly 23 percent of residential properties with a
mortgage - or more than 11 million homes - were underwater at the end of the
fourth quarter last year, up from 22.1 percent in the previous quarter.

Nevada
had the highest number of underwater homes - with 61 percent of mortgaged
properties being worth less than their outstanding loans.

Foreclosure sales, meanwhile, accounted for a quarter of all U.S.
home sales during the fourth quarter, up from 20 percent in the third quarter
but down slightly from fourth quarter 2010. according to RealtyTrac, another
real estate research company.

The pipeline of distressed homes has grown sharply. More
homeowners are seriously delinquent
and lenders are taking longer to foreclose as they work through paperwork
problems.

RealtyTrac expects foreclosure sales to grow next year, “as
lenders start to more aggressively dispose of distressed assets help up by the
mortgage servicing gridlock over the past 18 months,” said RealtyTrac chief executive
Brandon Moore. Moore
also expects to see a sharp increase in short sales, where a lender accepts
less than is owned on the loan.

On a more positive note, U.S. housing data reported during
the fall and winter came in slightly better than economists had expected,
raising hopes that the long-awaited recovery in housing may finally be
underway, according to the researchers at Wells Fargo Securities.

Sales
and new home construction increased modestly in 2011 and prices for
non-distressed property sales have stabilized in many markets, the authors
write.

But, the report also says, the improvements may appear rosier
than reality because of the area’s unusually mild winter weather.

November, December and January typically account for the smallest
percentage of new home sales each year. But if the weather is unseasonably
mild, as it has been this year in Charlotte,
a slight uptick in home buying can result in statistically large increases in
activity.

This appears to be what has happened during the past three months, the authors say,
as the seasonally adjusted data for new home sales rose 3.2 percent since
October, while the not-seasonally adjusted data fell .1 percent.

Overall, “the housing recovery probably looks relatively tame,”
the report says. “There are still a multitude of issues that need to be
resolved before a sustained self-reinforcing recovery can unfold.”

Ely Portillo

Ely Portillo

About this blog

Ely Portillo covers economic development for the Observer, writing about who's building what in a city that seems to be sprouting new apartment and office towers on every corner. He also writes about Charlotte's airport, a major hub that's also undergoing a huge growth spurt. A transplant from Maryland, he's been reporting on his adopted hometown for more than five years. If you have a tip or story idea to share, you can contact him by email or give him a call at 704-358-5041. For the latest news, follow him on Twitter @ESPortillo.